Written by Alain Valles, as originally published in The Reverse Review.

Loan officers who meet with senior clients in their homes can have a distinct advantage, as the effort can expedite the decision process, reduce competition, assist in product education and increase referrals.  Meeting first will accomplish a form of imprinting commonly seen in nature. According to a scientific definition that refers to birds, imprinting is “a rapid learning that occurs during a brief receptive period, typically soon after hatching, and establishes a long-lasting behavioral response. [Birds] are predisposed to form a strong attachment with the first object they see, which is typically the parent, and [this] allows the bird to quickly absorb the lessons they need to learn to survive.”

To be clear, I’m absolutely not calling seniors birds, but I do want to be the first person seniors see when learning about reverse mortgages. I want to be the one who educates them about the pros and cons of the program and earns their trust as an advisor. This helps ward off competition, build good will and prepare them for counseling.

The goal of the initial appointment is to educate the senior so that he or she is fully informed about reverses, which allows for an educated decision about whether or not to move forward. Never try to sell a reverse or tell a senior which reverse option he or she should take. I start off with two basic questions:

Question number one: “If I had a magic wand, which I don’t, what is the ideal scenario that you would like to accomplish?” This helps rank what is of most importance to the senior, whether it be the need for additional cash flow, home repairs or leaving equity to the children.

Question number two: “What do you know so far about reverse mortgages?” This will clue you in if the senior has done any initial research, is starting from scratch, or perhaps has misinformation that needs to be corrected, such as the common misconception that they must have no current mortgage.

No matter the answers, I always go over all facets of a reverse. The key reasoning for asking these initial questions is to hear the senior’s voice. I want the senior to become engaged in a conversation, which builds our relationship, rather than just giving a presentation. This is when I’ll talk about the role of HECM counseling and what will be required of them. I will tell the senior about how critically important counseling is and then jokingly say that I want counseling to be the most boring conversation of his or her life, because that will mean I did a great job explaining everything. If the counseling is exciting and everything the senior heard seemed brand-new, then I did a terrible job and would ask the prospective borrower to give me a second chance to explain everything. By meeting first with the senior, in those situations in which counseling went astray, I now have the opportunity to resurrect the deal.

One example of this was when a borrower needed all of the reverse proceeds to pay off a current mortgage. There was going to be little room for a line of credit. However, the borrower became very confused because the counselor said she would be able to have a large line of credit. Because I had met with her first and had earned some good will, she called me to let me know she thought I had misled her. After speaking with the counselor, it turned out that the senior became confused when the counselor asked if she had a lien on the property. She had said no because she did not know her large mortgage was a lien. Once the misunderstanding was cleared up, the loan proceeded smoothly.

Meeting in person and in the borrower’s home is critical as it gives clues about how the transaction may progress. From an appraiser’s perspective, I’ll learn if there are property condition issues, such as peeling paint or an illegal second kitchen. It should be no surprise that seniors who refuse to meet in their home quite often have significant issues. Though I try, sometimes I don’t get into the home, which is why I wasn’t shocked when, in one such situation, hoarding issues came to light that required a form of egress from the bedroom to an exterior door and an order demanding all rodents be exterminated. My personal favorite was the woman who refused to let me into her home until the attic was cleaned out. I repeatedly told her that was not necessary, but she was adamant. Finally, after six months, she called to move forward and again I told her that emptying the attic was not a requirement. She laughed and said she had known that all along, but had told her husband that they couldn’t get the reverse until he cleaned it out. I knew this transaction was going to be a fun one.

By gaining access to the home, you’ll obtain clues about what is important to the senior. Quite often there are religious items on the wall, pictures of grandchildren, a case displaying a folded American flag of a child lost in war, pets running around or sometimes grandchildren with no parent to be found. These are examples of important things you can learn about your borrower that would be difficult to glean from a telephone conversation or mail-away application. I always chuckle when I’m sitting at the senior’s kitchen table and see two or three of my competitors’ glossy reverse folders, knowing I’m the only one who offered to visit in person. Because of my in-person interaction, it’s rare that I lose out to the competition.

Sometimes with two borrowers, one spouse is much more dominant. By meeting in person, I’m able to make sure the quiet spouse has the opportunity to express his or her concerns and ask questions. Perhaps the person has hearing issues or other physical limitations. I’ve worked with people experiencing an array of devastating ailments, helping process loans for those who are deaf, blind, severely crippled and fighting cancer. I believe I can show more empathy by meeting in person than just talking by phone. I’ve cooked, cleaned, moved furniture and even found a missing cat on one appointment. I’ve also had situations in which the borrower doesn’t speak English or is illiterate, which obviously changes my course of action.

One sensitive topic with no clear-cut guideline is cognitive issues. Meeting in person allows me to gauge if the borrower is fully competent and able to understand the implications of the loan. In some cases, a spouse or adult child will try to hide the fact that the borrower has early dementia or Alzheimer’s disease. Just as troubling are elder abuse situations in which an adult child is coercing a parent to take out a reverse for their monetary 8

gain. In one instance, I had met with a borrower’s husband and gave my condolences about the recent passing of his wife. I became concerned though after repeated requests for a death certificate were ignored. Then one day I called the home and the wife, who was very much alive, said she was very confused about what was going on. Needless to say, that loan did not move forward.

The point here is that as loan officers, we must be aware if a borrower is not capable of understanding the terms of a reverse and involve other family members in the process, and we must not be naive about the fact that family members and even seniors themselves can commit fraud. Meeting in person will minimize these risks.

That said, involving the family can be key, and I always encourage the senior to invite any and all family members to our appointment. This allows others to voice their ideas and fears about the best course of action. It also enables me to ask family members an essential question: “If a reverse is Plan A, what is Plan B? A new mortgage, liquidating assets, monetary contributions from family members, moving...?” I do highlight that “decision by indecision” usually leads to more stress and not an optimal solution. Sometimes, children or other family members are willing and able to contribute financially every month to the senior to avoid or delay obtaining a reverse, or in situations in which a reverse won’t work because of a lack of equity or insufficient cash flow. Alternatively, these borrowers will have to consider downsizing or moving in with family. Again, my job is to educate everyone about a reverse mortgage, not push one. I can better accomplish this by meeting everyone in person.

Meeting in person will also flush out any potential silent assassins: the cynical relative who thinks we’re all in it for the money, that there won’t be any equity (for them) at the end of the day, and that Mom and Dad should just hang in there. When I can meet with these people, I can convert many of them into advocates of reverse mortgages and can alleviate their apprehensions. Nothing is more rewarding than getting referrals from those who were initially against me.

Another tip for discussing family matters: Sometimes I’ll playfully say, “Reverse mortgages are 5 percent math, 85 percent Dr. Phil, and 10 percent Jerry Springer. Almost every family has a Jerry Springer moment.” Invariably, the senior quickly chuckles and proceeds to tell me their Jerry Springer situation, which will help me explain how a reverse might help them and also expedite processing. And if a family outburst occurs during loan processing, I can usually diffuse the situation by saying, “Oh, I guess we’re having our Jerry Springer moment...”

My last tip for the initial appointment is to be explicit about expectations. Try to have the senior agree to what will happen next. The best answer is a “yes,” of course, but a firm “not interested” is also productive, while an “I’ll think it over” is not. When someone says they need to mull it over, it usually means the loan officer has not done a complete job in explaining the mechanics of a reverse or asking enough questions about the senior’s need for cash flow, home goals or external family factors that the senior is not yet comfortable sharing. Or sometimes they aren’t the true decision-makers and we need to uncover who is. But one point is clear: You wouldn’t be sitting with them if there wasn’t some need or at least a casual curiosity. In that case, I always recommend those who need more time think it over, and if they’re still not sure if a reverse makes sense, I encourage them to commit to attending a HECM counseling session. A different perspective from someone who is independent and unaffected by the outcome could help the senior decide if obtaining a reverse mortgage today will be the best option to ensure the highest quality of life.